Mr Buswell told The Sunday Times he would not be accessing a special Liberal Party fund set up for MPs to pursue legal action and would instead be personally footing the bills, which experts say could exceed $150,000.

Mr Buswell has defied pleas from Premier Colin Barnett, who faces a state election in March, to quickly resolve his ugly public dispute with Ms Carles and is pushing ahead with the legal battle.

The Treasurer has also threatened at least one media outlet, The Sunday Times, with legal action over claims he was at the centre of a drunken fracas at a party hosted by his millionaire property-developer mate Nigel Satterley.

Mr Buswell has also ordered his lawyers to use the courts to seize notes, emails, recordings and other documents from The Sunday Times, which broke the story that he was involved in a bizarre scuffle with seafood millionaire Nicholas Kailis at the function last December.

Ms Carles confirmed that her then- lover had drunkenly "dry-humped" Mr Kailis in an apparent joke that backfired when the millionaire reacted with force, damaging Mr Buswell's glasses.

The Fremantle MP said that Mr Buswell apologised for his behaviour the next day.

The event has raised questions of a conflict of interest for Mr Buswell, who controls the state's finances, and at the time was housing minister.

Another person in the room at the time banker Andrew Whitechurch has since been appointed by Mr Buswell to a plum job as chairman of a state government body controlling billions of dollars in loans for cheap housing. Mr Whitechurch has declined to comment about the party.

Mr Kailis, who was said to be furious with Mr Buswell over his behaviour that day, has also declined to comment.

After the story initially appeared in The Sunday Times on December 9, Ms Carles detailed the incident on 6PR and also took to Twitter with a series of claims about Mr Buswell. The Treasurer subsequently engaged high-profile lawyer Martin Bennett.

Mr Bennett, a defamation specialist, is also representing Lloyd Rayney in his multimillion-dollar lawsuit against WA Police.

A spokeswoman for Mr Buswell this week said he was "personally meeting the costs".

The legal action against Ms Carles represents a financial risk for Mr Buswell, whose personal finances took a hit this year in reaching a divorce settlement with his former wife, Margaret. Their 19-year-marriage collapsed when Mr Buswell began an affair with Ms Carles. Their romance lasted 18 months.

Mr Barnett has repeatedly urged both Mr Buswell and Ms Carles to end the feud, saying it was a distraction for the Government.

But Mr Bennett this week said there was little prospect of the defamation case settling at the moment.

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